Apple Earnings Preview: The Quiet Period

Mark Rogowsky
, ContributorI write about technology, trends and companies on the leading edge.Opinions expressed by Forbes Contributors are their own.

With Apple's third quarter earnings due after the close today, close attention will doubtless be paid to the number of iPhones sold, gross margins and guidance for the upcoming quarter. But as Parmy Olson reports here for Forbes, and as I did yesterday, much of the attention is already looking ahead to the coming quarter and the launch of the new iPhones.

It's become that way because Apple's flagship product has become so central to the company, representing about half of revenue. But its also true that ever since the autumn iPhone release cycle commenced with the iPhone 4s in 2011, Apple has gotten predictable around this time of year -- which isn't necessarily a bad thing.

Apple is counting on growth from new retail outlets like this soon-to-open store in Chongqing, China.

Consider that in the past two years, Apple has seen iPhone sales drop off significantly around this time of year as the iPhone gets "old" relatively speaking. With the 4s model year, sales fell sequentially by 26%. During the iPhone 5 cycle, the dropoff was a still sharp 17%. But in the upcoming quarter, which has benefited from the release of the new model in its closing days, iPhone sales tend to tick up by single digits (3% and 8% in the past two years).

If the pattern repeats -- and tomorrow's iPhone number comes close to the 36 million analyst consensus -- no one is likely to complain much about the results. Apple will have delivered about 15% growth for the current quarter and has a good chance to beat that number in the forthcoming one. The next iPhone appears headed for a Sept. 19 launch and the biggest geographic release ever, with all the major Chinese carriers on board for a new iPhone for the first time.

Apple guided revenues in the range of $36-38 billion when it released earnings last quarter and the expectations are for a slightly better number. But it seems probable that anything near that range will likely satisfy Wall Street, especially if the outlook for the coming quarter is similarly inline with expectations. That's not to say Apple isn't interesting, but rather that this period has proved less volatile than other parts of the year recently.

Indeed, Apple has rallied sharply over the past two summers as "new iPhone anticipation" has reached a fever pitch, though there's no guarantee the pattern will repeat in 2014. That said, the latest share count figures suggest the company has been buying back its stack on the quicker end of its planned trajectory, allowing earnings per share to rise more quickly than revenues might otherwise. (It appears to have retired upwards of 100 million shares post the 7:1 stock split.) And Apple has promised a product lineup for the remainder of the year that's it says will indeed wow people.

In the meantime, I'll be back later today with live coverage of what Apple does in fact say about its earnings. We'll also have analysis of what to watch for in the months ahead from multiple perspectives so check back for complete coverage.